Deals are down, but by no means out

Given the ongoing kerfuffle regarding the credit crunch, you could be excused for assuming that corporate activity in the pub sector had all but dried up completely.

But you'd be wrong. While mega-deals may be a thing of the past - at least for now - assets are still changing hands and banks are still backing buyers.

Still, changing circumstances have blown a chilly wind through the money-lending game. Whereas a couple of years ago financial institutions would have fallen over themselves to support a licensed sector project, now they exercise far greater caution.

Back in what many are now viewing as the halcyon days of the pub industry, banks would have listened to a business proposal to acquire a package of pubs and asked "how much do you need?". Now they are far more reticent. It's not so much a case of "how much?", as "maybe we can help".

In today's difficult market, where one or two per cent top-line growth - or even flat sales - is seen as an admirable achievement, the money men are nervous about lending to new operators. They want much more information from an acquiring company. Business plans have to be more rigorous, earnings forecasts more detailed.

While such demands are a pain in the entrepreneurial backside, this kind of prudence can only be a good thing.

Yes, it means more hoops have to be leapt through for the required finance to be secured. But if it means that the financial prospects for deals are more watertight - as much as any can be - then that's surely good news for all concerned: operators, funders and employees.

Businesses can and do fail. But it might just be the case that those getting funding in the current environment have a better chance of survival than those who left the start line in the heady days of plenty.